Polish VAT split payments 2018

Poland is proposing to introduce an anti-VAT fraud split payment regime from 1 January 2018.

The scheme involves customers paying the VAT element of any B2B supply directly into a supplier secure VAT bank account. This account is then directly accessible by the tax authorities for settlement of the VAT liability and reconciliation to the regular Polish VAT return.

Other features include:

The purchaser makes the decision to split the payments to the supplier on an invoice-by-invoice basis

All VAT-registered suppliers must offer a secure, "VAT bank account" for this facility, which will be established by the end of 2017 by any Polish bank, and provided without fees.

The VAT bank accounts will also be used for credit notes or refunds from the tax authorities

Tax payers may use the account balance for paying VAT split payments to their own suppliers

Suppliers will have to reconcile split payments received against their VAT return declaration of VAT due

VAT credits will be refunded within 25 days, compared to the existing 60 days

Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.